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Implementation dynamics for CRM system development

Conference Paper · September 2015

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British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

Implementation dynamics for CRM system development

Ian Cornera and Matthew Hintonb

a
Barston Consultancy Ltd, DE12 7AB, United Kingdom
b
Open University Business School, Walton Hall, Milton Keynes, MK7 6AA, United
Kingdom.

Corresponding author*: matthew.hinton@open.ac.uk

British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

Implementation dynamics for CRM system development

Summary

This paper considers the implementation of CRM systems based on evidence from
longitudinal case studies in medium-sized companies operating in the business-to-
business sector. This research addresses systems implementation from two key
perspectives. These are 1) the emergence of risks to implementations from an
organizational context rather than a technological context and 2) the emergence of
unwritten/unconscious strategies that contribute to the achievement of implementation
success. An immersive case study approach is employed where video data is used to
capture key phases of the implementation process. Analysis suggests that a set of four
implicit contracts exist between the main actors, leading to a successful
implementation, despite other failures. These ‘contracts’ are believed to make a
positive contribution for CRM implementation practitioners by mitigating some of the
ongoing organizational risks.

Keywords: CRM, system implementation, e-business, risk resolution.

Word Count: 2130

British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

Introduction

Customer Relationship Management (CRM) systems have been seen to offer

significant advantages to organisations seeking a more professional approach to the
acquisition and retention of customers. CRM can be viewed as the strategic use of
information, processes, technology and people to manage the customer’s relationship
with the firm, across the customer life cycle (Meadows & Dibb, 2012). This definition
acknowledges that CRM adoption requires the cross-functional integration of
processes, people, and marketing capabilities enabled by information systems
(Coltman, 2007). However, there is substantial evidence to suggest that a high
implementation failure rate reflects excessive reliance on technology alone to improve
performance and that insufficient attention has been paid to organisational and
behaviour-related issues. More broadly, it is claimed that CRM does not deliver on its
promises (Garrido-Moreno and Padilla-Meléndez, 2011; Coltman, 2007; Karakostas
et al., 2005).

The paper places CRM implementation as a subset of systems implementation but

recognises a number of characteristics specific to the genre. These include the notion
that CRM systems, unlike most other systems, have two distinct foci: firstly the
relationships that are external to the organisation with existing and potential
customers (the process of getting and maintaining customers) and secondly the
manipulation of those relationships (internal to the organisation) for best commercial
advantage (Gronroos and Powell 2000). Another characteristic of CRM systems is the
notion of linked or dependent satisfaction where customer satisfaction is seen to be an
unlikely achievement where there are users who are not content with their own
relationship with the organisation.

Earlier work has confirmed the existence of a set of risks associated with CRM
system implementation (Corner and Hinton 2002, Hewson and McAlpine, 1999) that
appear to explain a significant degree of implementation failure. Based on an analysis
of the general systems implementation literature (most notably Cavaye and
Christiansen 1996, Hartwick and Barki 1994, Delone and McLean 1992), the research
explores the dynamics of the relationships of the main actors in the implementation
process as prime determinants of whether an implementation is successful.

Initial case studies investigated the operational risks to CRM implementations and
developed a model to illustrate how the cognitive schemas and values of the actors in
the implementation process may influence the emergence of risks to the
implementation impacting subsequent business performance (summarised in figure 1).
British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

External
PM

External t o the organisation

Internal t o t he organisat ion

Sponsor Internal
PM

Users IS/ IT

Figure 1: Model of the relationships between the main ‘actors’ in a CRM

implementation.

However, the cases revealed an interesting paradox. Despite identifying a number of

risks that should have led to implementation failure, these projects were considered
successful by all parties. It was hypothesized that this ‘success despite functional
inadequacies’ reveals evidence of shared motivation to make the project successful
together with flexibility in the relationships between the main groups of actors. This
paradox has driven the further case research and model development that follows.

Research Design and Method

As one of the authors was Director of CRM systems for a company that was a
business partner for one of the main CRM system vendors in the mid-market sector,
this study utilises a longitudinal case study approach (as outlined by Orlikowski and
Baroudi, 1991). The position as an implementer of CRM systems had a significant
advantage regarding access to data and the facility to gather data as part of the normal
working day. Equally the involvement of the researcher as an actor in the
implementation process precludes virtually all research designs other than action
research (Chen & Hirschheim, 2004).

Case study data was gathered, primarily through the use of video recordings of
meetings and training sessions throughout the duration of the system development
project. Provided video recordings are carefully archived, and remain available for
repeated inspection and interpretation. The accuracy of the raw data cannot be
doubted provided the original linear recordings remain intact. The video recordings
are used to study the behaviours of the actors and validate the relationship model and
further explore these dynamic relationships. The interpretation of the raw data,
however, particularly when assessing the values that may lie behind actions and
statements must be largely subjective. However, relevant concepts from social
psychology offer a framework for subsequent analysis.
British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

The prime concept that has been adopted for this research is the notion of cognitive
schemas – mental frameworks around a specific theme that help to organise social
information. Baron and Byrne (2000) describe three main types of schema, personal
schemas which relate other people as people types, role schemas which relate to
specific social roles and how people act within those roles and event schemas which
relate to what happens in given settings, such meetings.

Wyer and Srull (1994) present evidence that schemas influence social thought by
exerting strong influence on the basic processes of attention – the information that
gets noticed, encoding – storing the information in memory and retrieval – the
recovery of information from memory for use in some manner. Information that is
consistent with established schemas tends to be ‘registered’ and enters consciousness
whereas that which is inconsistent tends to be ignored (Fiske, 1993) unless it is
sufficiently extreme that it cannot fail to be noticed. For information retrieval, when
schemas are activated when trying to recall some information, they determine what
information is brought to mind, usually that which is part of or consistent with the
schema. Schemas also tend to demonstrate significant resistance to change (Conway
& Ross, 1984). Consequently, each of the actors in the CRM implementation
relationship model can be expected to have personal, role and event schemas that will
impact upon the implementation process. The schemas will include personal values
and biases and the behaviour of the actors within the relationship is likely to be, at
least in part, a reflection of those schemas.

Preliminary Findings

The data indicate that both personal and functional values have influence over the
views and actions of the actors in the implementation. These influences, however,
appear to do little to illuminate why some implementations are considered successful
whereas others are not. After all, every implementation is subject to the influences of
personal and functional values. An instinctive response is to question the nature of the
influencing values with an expectation that more supportive and positive values result
in greater success. The literature, however, suggests many other factors have
considerable influence over implementation success. Swanson (1988), in particular,
suggests nine elements need to be well managed for successful implementation. The
nine factors described by Swanson are:

 User involvement  Performance level

 Management commitment  Project management
 Value basis  Resource adequacy
 Mutual understanding  Situational stability
 Design quality
A significant observation by Swanson is that during the course of an implementation
the ideal relationships between the factors change and not all can be under the
complete control of the responsible implementer. In the main case study there is
evidence that at least two of these were poorly managed (Project management and
financial resource allocation). Given Swanson’s findings it would be reasonable to
expect that the case study implementation would not have been successful in at least
some respects, yet it was successful. The system was implemented, staff were using it
British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

well and after the initial implementation more users were introduced to it and trained
on it. This presented a paradox where an implementation was successful despite
inadequacies in the implementation process. The final research question was,
therefore, ‘why was the implementation successful when important aspects of the
management of the implementation were inadequate?’

A number of positive aspects were noted in the research analysis, including the
willingness of the Financial Director to put aside consideration of integration costs in
order to move the meeting on, the lack of apparent rejection during the end-user
training and the statement of the regional Sales manager that the system offered the
company their first opportunity to define a customer. At a simple level it appeared
that the reason for success was that, collectively, the actors in the implementation
process wanted the project to be successful, sufficiently to overcome the problems
generated by the inadequacies.

The strong wish for success was evident in each of the four categories of actor seen in
the research and manifested itself in what are described here as implicit contracts.
Implicit contracts, in the context of the research, were unwritten and implicit in the
sense that the actors were unlikely to be aware that they had formed them or that they
were working to them. The strong wish for success appears to have manifested itself
in a willingness to generate the contracts implicitly and be flexible in the operation of
those contracts (see table 1).

Table 1: Overview of implicit contracts

Contract 1: External suppliers: We shall commit ourselves to providing a
solution to your business needs provided you tell us what you
need, pay us for what you ask us to do and listen to our advice.
Management users: We shall use your system provided it does
what we want, the end-users are prepared to use it and it does not
cost more than we can afford.
Contract 2: Management users: We shall provide you with a system that will
make your work easier provided you use it properly.
End-users: We shall use your system provided that it does what
you say and does not make our work more difficult.
Contract 3: External suppliers: We shall do the hard work with this system
in terms of customisation and installation provided your
infrastructure can handle it. We are prepared to train you in the
relevant skills so that you can take over and run it provided you
want to. Although not evident in the data this is a standard
position.
IS/IT: We shall support your activities provided the system does
what it should.
Contract 4: End-users: Our use of the system is conditional on you providing
us with the technology that enables it to work, and fixing things
when they go wrong.
British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

IS/IT: We shall provide you with the technology and support so

long as you learn to use it properly.

One single actor in the implementation, the Operations Manager, stood out from the
others by an unwillingness to contract for some aspects of the implementation. The
reasons for this were not evident and any suggestions for the unwillingness would be
speculative. The contrast between the behaviors of the Operations Manager and others
contributed to the intuitive process of recognizing ‘willingness to contract’ as an
observable trait amongst the group.

Analysis of the data was required in order to develop a model (figure 2) that reflected
and described the dynamics of the flexible and implicit contracts that had been
developed and were in operation. Within this model the management team was seen to
consist of all senior management including the managing director. IS/IT is shown as a
separate function because they were seen to have had a different relationship with the
internal supplier from that of the management team and equally a subtly different
relationship with the users of the system.

External suppliers -
customisation, installation
and specialist
implementation expertise.

Contract 1

Contract 2 End-users
Management users
System selection, Sales data entry, for later
Contract 3 analysis and forecasting.
implementation
management, operational Personal management.
management

IS/IT
General purpose support
for the project, long term
infrastructure support
and system operation
Contract 4

Figure 2: The inter-relationships of the actors framed by their implicit contracts

The researchers are aware that a postulation that the actors in a successful CRM
implementation, and conceivably in other successful system implementations, operate
implicit contracts is a challenge to mainstream IS literature which focuses on user
acceptance as an indicator of success, for example, Ives et al (1983), Thong and Yap
British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

(1996), Nah et al (2004). The research programme evaluated user acceptance as an

element of the overall data analysis and found the concept useful but incomplete in its
definition of users and too narrow a construct to cover the range of behaviours
demonstrated in the data.

The impact of cognitive schemas and values on the actors’ dynamic relationships has
led to a reformulation of the model presented in figure 1. In figure 3 the central core
dimension is still that of the actors’ relationships. The lower level illustrates the
emergent risks that are generated as a result of the implementation dynamic plus other
externally generated risks, such as rapid change. The upper level illustrates the
cognitive schemas of the actors in the relationship model.

Figure 3: Model of the CRM implementation process in 3 dimensions

Future Research

The identification of the implicit contracts between the main actors is believed to
make a positive contribution to CRM implementation and mitigate some of the
organizational risks established in prior research. The work is seen to have practical
application through the provision of insights for the development of management
tools for encouraging implicit actor-set consensus and flexible contracting. Implicit
actor-set consensus describes the condition of an implementation team, consisting of
both internal and external actors, that is operating co-operatively towards achieving
successful system implementation sufficiently to overcome hindrance. ‘Implicit’
British Academy of Management Conference (BAM2015), Portsmouth, 8-10 Sept 15

indicates that the condition has not been formalized but is implied from the
behaviours exhibited. Flexible contracting refers to an absence of rigidity and
stubbornness on behalf of the actors when establishing the contracts and when
changing the contracts as the implementation progresses. It recognizes the implicit
nature of contracts as those that have been detected as unwritten, and probably
unconscious, understandings between the actors drawing on their cognitive schemas.
Elements of flexible contracting are explored with this objective in mind. The results
encourage the adoption of the actor-set consensus and flexible implicit contracting
model as a basis for developing tools to assist in the implementation of CRM systems.
The development of tools for this purpose, however, may need further research. A
significant characteristic of the behaviours observed was the implicit nature of both
the consensus and the contracts. The development of management tools to assist
implementation that formalize a process of achieving consensus or formally
negotiating contracts changes the nature of the construct from implicit to explicit.
Research will be required to discover if explicit actor-set consensus and flexible
explicit contracts are productive but the practitioner is presented with the opportunity
to include these constructs as elements of an implementation programme. It is
believed that consideration of actor-set consensus and flexible contracting offers
implementation practitioners the opportunity to influence the establishment of
productive implementation environments.

It is worth reflecting briefly on the use of video recording as a means of data

gathering. The greatest advantage of video recording is that behaviour, verbal and
nonverbal data are recorded in context. Recorded behaviour requires interpretation but
the raw data remains as raw data that may be reviewed and interpreted by others. An
observer may only analyse an event from one set of observations with whatever
cognitive schema is in place filtering the behaviours that are observed. However, a
video recording may be revisited and analysed ad infinitum by one or many people.
The volume of data provided by video recordings is large and multi-level. This means
that video can take advantage of seeing and understanding the process of change.

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